In short
Fast Money episode covers Trump’s selection of Kevin Warsh as next Fed chair, market implications for rates/inflation, and cross-asset moves (dollar, Treasuries, gold/crypto). It also discusses MAG7/AI spending and upcoming Alphabet/Amazon earnings, AI’s impact on gaming (Roblox/Unity/Take-Two), energy earnings (Exxon/Chevron), and CEO changes at Walmart/Target.
Guests/backgrounds
Steve Leisman (CNBC contributor; former Fed/markets reporter). David Zervos (Jeffries chief market strategist; previously a Fed-chair contender). Rick Sherland (Sherland Partners founder; senior advisor to Wedbush Investment Banking). Courtney Reagan (CNBC reporter). Panelists on desk: Melissa Lee (host), Tim Seymour, Steve Grasso, Bono, Mike Coe.
Key claims
Warsh could be hawkish-to-moderate; committee/bond market constrain cuts. Inflation expectations remain anchored despite tariff-related PPI concerns. AI demand is “just getting started,” with cloud capacity constrained by buildout, not demand. Gaming selloffs may be overdone; AI tools should reduce game production costs. Bitcoin weakness reflects risk-off; Walmart/Target leadership changes differ in execution style.
Notable examples
Fed Governor Michelle Bowman sees three cuts this year. Warsh futures pricing: one cut by June ($3.49) and another by year-end ($3.13). Alphabet’s “Project Genie” (Google AI Ultra) triggers gaming stock drops. Roblox down ~40% in three months; options show upside call buying after the selloff. Exxon/Chevron beat earnings; Tesla headline about potential SpaceX merger. Bitcoin hits lowest since late November; Walmart/Target CEO transitions Sunday.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOTrump's Fed Chair Pick: Kevin Warsh
0:00 to 0:22
Discussion on Trump's selection of Kevin Warsh as the new Fed chair and its market implications.
“Mazda has been named Consumer Reports' safest new car brand.”
Trump's Fed Chair Pick: Kevin Warsh
1:41 to 2:28
Discussion on Trump's selection of Kevin Warsh as the new Fed chair and its market implications.
“On the desk tonight, Tim Seymour, Steve Grasso, Bono and Eisen, and Mike Coe.”
Market Reactions and Rate Expectations
2:28 to 4:22
Analysis of market reactions and expectations regarding rate cuts under Warsh's leadership.
“So that begs the question, which Kevin Warsh will we get?”
Warsh's Approach and Qualifications
4:22 to 6:27
Exploring Warsh's qualifications and the balance he must maintain between different economic views.
“I mean, the committee may not vote for rate cuts.”
Implications for Inflation and Growth
6:27 to 9:48
Discussion of inflation dynamics and growth in the context of Warsh's Fed chair position.
“Walsh is going to do his job, because I think he will.”
The Fed's Impact on Mortgage Rates
9:48 to 14:01
Insights on how the Fed's actions influence mortgage rates and housing affordability.
“And, you know, maybe he'll have success.”
Housing Market and Interest Rates Discussion
14:01 to 15:16
Explore the dynamics of long-term interest rates and housing affordability.
“But I would push back a little bit on the inflation because at the end of the day, one of the biggest components of long term interest rates is inflation expectations.”
Market Reactions to Warsh's Nomination
15:17 to 17:26
Analyze the market's response to Kevin Warsh's Fed chair nomination.
“I mean, it seemed like every day there were lots of crazy moves in the market.”
Gold and Silver Market Dynamics
17:27 to 19:51
Discuss the recent shifts in gold and silver prices and market sentiments.
“So I do think you're seeing a bit of shift away from indexing being used as a hedging tool to indexing now being more of an accurate hedge.”
Disney's Leadership Transition
19:52 to 22:28
Examine the upcoming CEO transition at Disney and its implications.
“Disney's board is set to meet next week, according to sources close to the situation.”
Show all 21 chapters
AI's Impact on Gaming Stocks
25:19 to 28:03
Explore the effects of AI advancements on gaming companies like Roblox.
“Plunging today after Alphabet rolled out its latest tool to Google AI Ultra subscribers.”
Big Trends in Tech
28:03 to 28:23
Discussion on the current state of trends in big tech and Roblox engagement.
“but also just what is going on with the big trends.”
Big Trends in Tech
28:54 to 29:25
Discussion on the current state of trends in big tech and Roblox engagement.
“The platform that acts like a living system, delivering the latest in data performance, security, and innovation without ever slowing you down.”
Market Overview and Stock Performance
30:41 to 31:59
Analysis of stock performance including Dow, S&P, and notable companies like Tesla.
“Chevron and ExxonMobil both managing gains after earnings this morning.”
Tech Earnings Analysis
31:59 to 35:48
Insight into recent tech earnings and the outlook for software and AI companies.
“I saw the headline run, to Mike's point, humanoid robots, full self-drive, data centers in the sky, SpaceX valuation.”
Enterprise Demand for AI
35:48 to 41:31
Discussion on enterprise demand for AI and the market dynamics shaping it.
“I think you have a core thesis here that the cloud is still capacity constrained and that ultimately all this consternation about demand is hogwash, if I may.”
Bitcoin Market Update
41:31 to 41:58
Analysis of Bitcoin's current performance and market sentiment.
“So I don't I don't see there being a concern about a bubble of demand and you know the financing costs are big Yeah, and so there's concern that well will we have the demand down the road?”
Bitcoin Market Analysis
42:05 to 43:59
Discussing Bitcoin's recent price movements and market sentiment.
“Welcome back to Fast Money Crypto getting crunched.”
New Leadership at Retail Giants
44:00 to 45:42
Overview of new CEOs at Target and Walmart and their strategies.
“Big C-suite changes have taken effect at both Target and Walmart.”
Insights on Stock Performance
45:42 to 46:39
Discussion on stock performance and analysts' opinions on the changes.
“So that's just basically keep doing what you're doing because they're doing it very, very well.”
Final Trades Segment
46:39 to 47:15
Participants share their final stock picks and investment strategies.
“print next week five percent implied move following i would use karen's three-day rule of caution but i think take two is going to give you an opportunity to own it for the long term Timbo.”
Transcript
Automatic transcript. May contain errors.0:02Mazda has been named Consumer Reports' safest new car brand. It starts with our approach. Every Mazda comes standard with proactive safety features. So you're more aware of what's around you, more focused on the road ahead, and ready before problems ever start. Mazda. More of what matters most to you. Go to mazdausa.com to learn more. Consumer Reports does not endorse or promote any product. At Edward Jones, we believe rich isn't about having life all figured out.
0:34Tim Seymour:It's opening yourself to all the possibilities. That's why your dedicated financial advisor provides long-term planning built around you, meeting you where you are, and helping you get closer to where you want to be. So no matter where you're starting from, you can move forward with confidence. The key to being rich is knowing what counts. Let's find your rich. Edward Jones, member SIPC. Live from the Nanzac Market Sight in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. The wait is over. Donald Trump finally announcing the pick to lead the Fed. But what should markets expect from Kevin Warsh?
1:12Tim Seymour:A fight against inflation or the rate cuts the president has been calling for? We'll debate that. And half of MAG7 earnings are in the books, but some big names still to come. What did we learn about the AI trade in the past few days? And what should we expect from Alphabet and Amazon next week? Plus, Could gaming stocks like Roblox be the next victim of the AI boom? Bitcoin continues to break down and new CEOs at Walmart and Target take the helm on Sunday. What will the leadership changes mean for the companies and the stocks? I'm Melissa Lee. I'm to you live from the studio via the NASDAQ. On the desk tonight, Tim Seymour, Steve Grasso, Bono and Eisen, and Mike Coe.
1:46Tim Seymour:We start off with the news the markets have long been waiting for. President Trump selecting former Fed Governor Kevin Warsh to succeed Jerome Powell as chairman of the central bank. The announcement via Truth Social this morning comes after years of Trump criticizing Powell for not lowering rates fast enough and even a criminal investigation by the DOJ over central bank renovations. Stocks closing the day down, though off their lows of the session. The S &P managing a gain for the week in all major indices up in January. But a real question brewing in other markets while longer-term treasuries ticked higher.
2:17Tim Seymour:The two-year rate hit its lowest level in two weeks and the dollar rebounded from four-year lows, notching its best day since July, suggesting maybe the market thinks Warsh may be more hawkish than expected. So that begs the question, which Kevin Warsh will we get? The hawk who's rallied against inflation may keep rates high or the dove who will make the cuts Trump wants? For more, let's bring in Steve Leisman. And Steve's also got some headlines from Michelle Bowman. Steve. Yeah, just before we get to the new guy, let's get to some of the existing folks here. Fed Fed Governor Michelle Bowman says she sees three cuts this year, with the only question about the timing of implementing the cuts that she sees.
2:56She still sees downside risk to employment, says the labor market remains vulnerable, could have voted, she said, for a cut at this last meeting because policy is still modestly restrictive. But she has seen some signs of stabilization in employment, as was mentioned in the statement. The Fed, she says, can afford to take time and keep policy powder dry for a little while. she does mention the Fed gets two jobs reports and inflation reports before the March meeting so maybe that's more alive for her than it is on the market. Meanwhile the 55 year old Warsh would take the helm with immediate expectations that it would cut rates but the question is how much cutting can he really do?
3:32The President saying in his announcement that I have known Kevin for a long period of time and have no doubt that he will go down as one of the great Fed Chairman maybe the best. On top of everything else he is central casting and he will never let you down. You have to wonder if the president is reassuring himself that Warsh won't let him down because that's how the market is priced at least right now. Futures markets have only priced in a cut when Warsh takes office. That's the$3.49 in June. And another one by year end. That's the$3.13 in December. And then it goes sideways into 2027. Of course, a lot can happen.
4:08The economy can change. But if the U.S. economy does as well as the president advertises it will, it seems doubtful that his new chair will give him the low rates and the cuts he so desires. Melissa?
4:20Tim Seymour:Well, there's the element of the committee. I mean, the committee may not vote for rate cuts. And then there's just this notion that if he does get into office and manage to get through a rate cut, the question about Fed credibility, which could really cause ripples in the market? You know, there's the committee, Melissa, but there's also the much more powerful bond market, right? And if you follow Jeff Gundlach, who you know says that the Fed follows the market, I don't know if that's 100 % true. I think there's a little bit more back and forth than Jeff puts out. But in general, it's not a bad trick to follow what Jeff Gundlach says and make money that way.
5:01And so the bond market is going to constrain what he can do. And Kevin knows this, right? He's been working with Stan Druckenmiller for a very long time under one of the best investors of all time. And there's just no way that Kevin Warsh can go further than the market will let him go. And also, as you suggest, Melissa, with that feedback, further than his committee will let him go.
5:25Tim Seymour:Right. Steve, thank you. Steve Leisman. Pleasure. What do you make of the pick and the market reaction?
5:31Karen Finerman:Well, I think the market reaction has to be taken in the context of we had a dollar that was so oversold in a short-term basis. I mean, the dollar was down almost 2 percent this year in a straight line. I don't think that Kevin Warsh was a major reason why the dollar rallied today, although give it any number of reasons. I think what Steve points out is very important, and he's reputed to not necessarily be an ideologue. I think it's fascinating that today's the day on a day when we had a PPI number that frankly tells me that fears of getting back or not getting back to an inflation target are very much warranted.
6:07Karen Finerman:And that intermediate good prices are things that we haven't really felt the total fall through and the flow through from tariffs. So, I mean, I'm not saying inflation is run out of control, but we get this announcement on a day when PPI today was not the Fed's friend if there's someone that's looking to cut. So I think it's important to get some stuff out. I appreciate the balanced and rational approach to how Mr. Walsh is going to do his job, because I think he will. He's been around a long time. He's been around markets. I think there's an important dynamic that Trump recognizes. He needs to have a candidate that also can get through Congress and get through a Senate that needs to appoint him and at least approve him.
6:43Karen Finerman:And that's kind of what's been shown in the last few weeks how important that is to Trump. Well, the most important thing, to Tim's point, is that you needed someone who's not a Trump puppet. And there's no way anyone's going to say that Warsh is a Trump puppet. He might tilt from hawkish to dovish, but he's been there since 06. He's seen the great financial crisis. He's seen a number of other crises. He's seen COVID. He was not a proponent of large QE. So I think that's what most people looking at the Fed don't want more of. We went from a$9 trillion balance sheet, or I should say before pre-crisis, I think it was around four.
7:21We went to nine. Now we're down around sixes. I think he's probably going to keep it right there. I don't think there's anything to worry about. He's going to be palatable for both the Democrats and the Republicans and both the Hawks and the Doves. So I think it was a great pick. It was surprising to me that he didn't go with someone a little more dovish.
7:41Tim Seymour:Let's get more from CNBC contributor David Zervos. He's chief market strategist at Jeffries. David was one of the early contenders for Fed chair last year. David, great to see you. I don't know if you're upset or relieved, but putting that aside, what do you make of the pick? You know, we were speaking to Adam Christofoli of Vital Knowledge earlier in the previous hour. And he said, you know, there's a small market negative aspect to this in that Warsh wants to shake up the Fed. He said something in an interview with another network about breaking heads. He wants to reexamine the models, relook at how things are done.
8:17Tim Seymour:Is there any risk introduced by that? Melissa I think I mean we should step back and think about all the candidates and I think all the candidates kind of said the same thing along those fronts that they wanted to kind of question how the Fed does business what all these PhDs are doing how the models have failed both them and and their mandate of maximum employment and price stability I think there are a lot of great questions and Kevin's a great person to begin to answer them and I think he's thought a lot about it since he left back in 2011 so I would just kind of put it all in perspective that these are this is an amazing group of candidates and i said that from the beginning that that but what uh what a treat it was for me to even be included in it and i just think we are we're lucky to have someone like kevin and we would have been lucky to have someone like rick or kevin has it as well they are fantastic picks and they will do a great job and i think the market is kind of telling you that the market didn't respond that much to this even though a lot of people wanted to have this bearish response or negative response at the long And, you know, it wasn't it wasn't what many had thought.
9:22Tim Seymour:I mean, is the market reaction, the lack of market reaction, does that really tell you that we don't really know what he's going to be able to do at the end of the day? I mean, that that's what it seems to me. Remember, Melissa, I think we all have and maybe the president even has a little bit of a elevated view of what a chair can do when they walk in. There's 11 other people on that committee and it's one person, one vote. You have to do a lot of convincing. You have to do a lot of persuading if you want to move this committee in a significant way away from the tendency that it's sitting at today.
9:53So, I mean, Kevin's a great orator. He's a great thinker. And, you know, maybe he'll have success. I think Kevin Hassett or Rick Reader or many of the others on that list could have also had great success. But we're lucky to have had all of these picks, in my opinion, and we're lucky to have Kevin there. He just he has the experience that that many did not have being there on the board for five years, I believe. And he brings a look, brings a healthy questioning of all of what has been done over both the global financial crisis, where he had a lot of Christians and then what we learned over the COVID crisis.
10:29So I think making a big deal out of this early is probably unlikely. And we should all be thanking our sort of lucky stars that we have such qualified people overall to to sort of man the ship at the Fed. I think, you know, not to not to get, you know, too focused on the past, but we've had some pretty poor candidates roll through the Federal Reserve building. And one might even argue some still there. And this is a huge step up over many that that have been there and are are there now.
11:01Karen Finerman:David, Tim, so play the role that maybe you might have played, but let's play the role of really the market now and interpreting both where we are with inflation, but also where the market is positioned for a Fed. And frankly, where we are seeing some pretty solid growth numbers and where, again, today we had a PPI number that to me in a one off says there's some upward pressure on intermediate goods that could still feed through. Where do you think the market has priced this? Where do you view this balance of that inflation genie and ultimately, though, pretty solid macro? I mean, is the Fed behind the curve or should they be sitting tight?
11:41I think it's one of the most fascinating macro environments we've been in in a very long time. We've had incredible growth, not just this past year in 2025, but actually 23 and 24 were great growth years. And the unemployment rate's been rising the whole time. It's just such an unusual period of incredible growth, strong equity, strong earnings, strong profits, and just not a lot of job creation. And I think, you know, Rick Reeder talked a lot about that in some of his analysis going into all of this. I think a number of other commentators have pushed on it. I've certainly pushed on it. I think it makes for a very unusual time.
12:18And I think NEC director has to have said, look, this is supply-side growth. We're seeing more disinflationary pressures over the long run than inflationary pressures because it's coming from productivity. So I think Kevin will be this. Kevin, Kevin Warsh will be open to those ideas and kind of is a student of the Greenspan era in the 90s when we had this last. So I'm optimistic that we're not going to get too caught up in this idea that, oh, strong growth is some reason why we need to be preemptively hiking. I think that's a mistake. And I think I don't think Kevin will be making that mistake.
12:47I think we have a lot of reasons to be excited about how far inflation has come down and how stable long run inflation expectations have been. They've been unbelievably stable throughout all of this inflation shock post covid. So to me, the inflation side of the mandate is more or less. I know we're sitting at three percent in core PC, but it's more or less done only because inflation expectations just remain so solidly anchored in and around two percent. And when you look at every piece of data from the TIPS market to the yield curve to the survey data, it's just remarkable how clean inflation expectations came through this mess.
13:27Hey, David, you know, Rick Reeder brought up an interesting point just to further your explanation on this, that the Fed doesn't really have much effect on inflation in their toolbox, but they do have more of an effect on mortgage rates. Can you extend on that thought? Well, I mean, I think Rick's absolutely right. They do have a lot of ability to move on on yields. And I think the Treasury, I think Secretary Bestin has shown that he's willing to use the GSE balance sheets, which are part of the balance sheet of the Treasury under conservatorship to try to drive that as well. So I think there's there's a lot you can do there.
14:03But I would push back a little bit on the inflation because at the end of the day, one of the biggest components of long term interest rates is inflation expectations. And again, they are very well contained. So I think we have some room to bring mortgage rates down, even without seeing significant rate cuts, just, you know, driving some of the mortgage purchases that the Treasury wants to do through the GSEs, maybe changing some of the fee structure and the like that the GSEs charge to guarantee the mortgages. But, you know, we need we need to really think about housing affordability in a different light.
14:36We need to think about how people get down payments, how youth can access the housing market. And more importantly, we just need kind of the job picture to clear up because it's really those younger homebuyers, the ones that are sort of angry and are voting with their feet a little bit in the last election in November, away from the Republican Party that are saying, hey, you know, we need to figure out a path forward here that works. And this, you know, this isn't really working when we have student debt. We got credit card debt. We've got a degree and we're still not able to get a down payment for a house.
15:06And this mortgage market's inaccessible. So someone's got to come up with some good plans. And there are a lot of them out there, and the Fed will be part of that. But I think it will come more from the administration than the Fed.
15:15Tim Seymour:All right, David, great to see you. Thank you. Always a pleasure. David Servos. All right. So, Mike, what's your take on Warsh? And put it in context of the markets. I mean, it seemed like every day there were lots of crazy moves in the market. At the end of the week, though, we're basically flat on the S &P 500. Well, we are flat. I mean, we had a pretty wild day, though, didn't we? I mean, first of all, taking a look at the precious metals and what went on there, I think that was pretty wild. If we take a look at the options market and what they're implying in terms of uncertainty, not just over the next 30 days, but going out to the end of the year, we take a look at the VIX futures curve.
15:51So spot VIX was up about 0.56, which is actually slightly more than you would normally expect to see it up on a Friday with the market down 29 points or so. So sort of a simple heuristic, a way to think about it is that, you know, for a 1 % move in the S &P, you might expect to see the VIX move one point. And we can see that that relationship didn't really hold today. VIX actually was up. And actually, the VIX futures curve basically broadly was also higher. And one might think that with less uncertainty with respect to the Fed choice, that some of that curve might have actually flattened out a little bit.
16:25But then you take a look at rates. And, you know, what's interesting here is that when you think about the real problem that we're facing with rates, we have a real fiscal imbalance. You need to grow your way out of it. So if you have a Fed chairman who is going to focus on that and is going to try to control inflation, possibly by, you know, paring off the balance sheet slightly, but keeping the short end a little bit lower, basically to sponsor a bit of growth. You know, that does seem like a good recipe as long as inflation expectations support it.
16:56Tim Seymour:Bono, what's your take? Well, listen, I think it had been quite volatile leading up to this. Mike spoke today, but I think some of the price action of volatility that we've seen, particularly in precious metals and some of the base metals, you know, the whole dollar debasement narrative was in full effect as well as Fed independence or lack thereof. So I do think Worcester's election does shore up some of those concerns. And you saw that reflected in some of the profit-taking that we saw in the precious metals, as well as some of the reversal that we've seen in dollar, DXY, and some of the related type of trades there.
17:34So I think it's net positive. The unknown is kind of taken out. I will say I do think some of the spike up in VIX that we saw today is attributable to the fact that we are in the middle of earnings season And we have some of the mega caps, which are a large weighting of that moving tremendously. Microsoft, for example, yesterday. So I do think you're seeing a bit of shift away from indexing being used as a hedging tool to indexing now being more of an accurate hedge. And, you know, the more that we see the market being driven by the mag seven and that core mega cap techs, you will see a better correlation with the VIX there.
18:11And I think we saw some of that play out today on metal specifically.
18:14Tim Seymour:Tim, I got to go to you. Do you think that there's a lot more downside flush to happen?
18:19Karen Finerman:Well, first of all, I don't think Warsh has anything to do with the gold pullback today. I mean, gold had rallied 32 percent this year. If you want to have a reason for it. But, I mean, gold was stratospheric. I'm not taking victory laps here. But last Friday I said I think gold, I was selling gold calls. I said I was selling copper calls. I said this is a place where this has gotten overdone. I couldn't feel more secure about a gold trade. I couldn't have felt more insecure about the price action in terms of where we were going in the short term. I think gold could pull back a little bit more.
18:47Karen Finerman:Then 4 ,600 is a probably good level in gold. None of this is a sign that markets are unsteady. And the debasement trade, which is now a term out there that I think is, I think we're in an environment where there are two or three macro dynamics that aren't going to change overnight. I don't think the Fed's going to change it. I don't think we're going to go see a dollar completely reverse course. But trades get overdone. And I think that's what happened. I mean, the move in silver was comical and just as comical on the way down. But we were talking about it. It was comedy on the way up.
19:23Tim Seymour:We're saying that it was the memification of the silver and gold trade. So you can't search for fundamental drivers on the downside if you're saying a memification drove the trade higher. Yeah, I think it's more of a trading aspect. Markets do look for a reason to actually revert back to where they were. They did have incredible moves. If you look at where they both started the year. But I would say off of this bottoming or this ratcheting down, look for the supply demand deficits in the middle of your choice and pick the one with the biggest one. We've got a news alert on Disney. Julia Borson's got more on this.
19:53Tim Seymour:Julia. That's right, Melissa. Disney's board is set to meet next week, according to sources close to the situation. And the board is expected to vote on a successor for CEO Bob Iger when his contract expires, which is said to happen at the end of this year. Now, we may get an announcement from the board by the end of next week. Now, Iger is reportedly planning to step down as CEO and pull back from daily management, according to sources cited in The Wall Street Journal. So now the focus turns to the two executives seen as front runners for Iger's CEO role to replace him. Parks chief Josh DeMauro and entertainment co-chair Dana Walden.
20:36Tim Seymour:Disney does report his quarterly earnings on Monday morning. We're going to be watching to see what the results say about Iger, about Iger's legacy, as well as Dana Walden and Josh DeMauro's divisions and seeing how the results may indicate which of these leaders is best positioned to replace Iger. Back over to you. All right, Julia. Thank you, Julia Boorstin. I wonder what the predictions market says. I'm just joking. I don't. I don't know if you have a comment on either of these two candidates or on the earnings that we're going to get on Monday morning.
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21:07Karen Finerman:I don't have a lot to say on the candidates. I will say that, you know, in a world where here we were talking about a shakeup at the Fed. How about a shakeup at Disney? You know, Iger comes back in to replace Chapek and the stocks done zero and the stocks, you know, bounce a little bit. I think in terms of the numbers that we're going to see, I continue to be encouraged by the strength of DTC and the margin profile. Frankly, overall, the rebundling dynamic that has Disney pulled into a lot of other kind of former legacy streaming packages is something that actually enhances some of the network power that's already there.
21:42Karen Finerman:I think a bit of the feeding frenzy that seems to have gone on around Warner Brothers is something that also I think plays in well into the intrinsic value of the Disney property. It's all about DTC to me. There'll be some cyclicality in parks. I don't expect a lot.
21:54Tim Seymour:I'm sure these two candidates are amazing managers, Mike, but it may say something. You're choosing between parks and entertainment and the entertainment side of Disney, the show business side of Disney. You know, I mean, when it came to Disney, it used to be a single property that we always thought of, first and foremost. And now I think actually parks is playing into it because I think that's a little bit less in flux than than what we're seeing going on elsewhere. So I think that's an important part of the business to keep an eye on. I mean, just based on the price action that we saw late this week in Disney, plus some of the options activity that we saw late this week, there was an uptick in sentiment.
22:33I mean, we can see that just in the price alone today. I think the stock was up, you know, one point three dollars, something like that. So you're showing a price that looks a little bit lower to me. I'm not exactly sure why. I have it up a buck and a quarter today. But, you know, we had a lot of call activity, 40 ,000 calls versus probably 19 ,000 on average. So they're positive going into the print. And I think this was an expected move.
22:58Tim Seymour:By the way, Cal, she does have a contract. I mean, you can, you know. What do we got? 86 % for tomorrow. So the guy runs Parks. Yeah. Okay. Parks is now 38 % of the overall revenue. Obviously, entertainment's still the bulk of it is 55 percent and nobody's Iger. So I think the stock really likes the Iger premium. With him in this last stint, the stock is up 20 percent. Coming up, the AI revolution comes for gaming. Roblox shares plunging as Gemini makes his first foray into the video game space. Is it game over for the trade? Find out next. Plus, Exxon and Chevron both out with earnings this morning.
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25:17Tim Seymour:Welcome back to Fast Money Gaming Stocks, Unity Software, Roblox, and Take-Two. Plunging today after Alphabet rolled out its latest tool to Google AI Ultra subscribers. The model called Project Genie allows users to generate interactive worlds and create characters with just a simple prompt. The big tech company is calling it an early research model. I mean, is this sort of the displacement moment that software is suffering right now, Bonoan? Listen, I think directionally the moves are right in the short term. I think the extent to which you had the sell-off, and I think the relative moves were accurate.
25:53For Take-Two, for example, this is a deep-pocketed, large-budget operation with a self-contained type of narrative. So I don't really see that disruption there. And Roblox, in terms of the coder user base and the breadth and scope of who it reaches, again, I think there is somewhat of a moat there. I think Unity, rightfully so, was off more than the others because I think the value proposition is very similar there and I see the most crossover there. Ultimately, I think that these tools are going to be used by all three companies and bring down costs of producing games across the board. So I do understand the shock short term, but I do expect that in the long term, these moves end up being overdone in the immediacy.
26:36Tim Seymour:Mike, what's your take? Yeah, I mean, kind of to what Bono was saying, I mean, unsurprisingly, given the move we saw today, there was a big knee-jerk reaction going on in the options market. It traded more than six times its average daily volume. But what's interesting is that if you exclude the volume that was associated with expiration today and next week, and I will often do this. When I see a big gap, I'll say, OK, let's throw out what's going on for the options that are expiring right now and next week, because that's basically a knee-jerk reaction where people are trying to hedge just the moves over the next couple of days.
27:08Push it out a little bit further. And if you do, you go beyond the February 13th, Friday there, you're actually seeing that the top three most active contracts were all upside call buying. So I think that there's some view here that maybe this is just going to take a few more days to play out and that maybe it'll find its footing.
27:25Tim Seymour:You know, I saw the story today and I saw the move in these stocks and I felt really bad for guys junk, Tim. Yeah, well, it's often it's a common sentiment.
27:35Karen Finerman:You're not the only one. And there's a lot of concern for guys junk out there. Having said that, I do think the gaming dynamic of AI's impact on software, bring it back to Roblox. Yes, Roblox has completely round tripped a massive move and is down 40 percent in three months, even more so. And it looks like it's really all the way back to a level which people are truly assessing not only the engagement factor, but also just what is going on with the big trends. I actually think Roblox is interesting here. And I reached out to my two channel checks, which are the people in my house that are major Robloxers, and they don't seem to be concerned.
28:16Karen Finerman:I do think also this age verification dynamic of the roadblocks is something that's actually not helping in terms of engagement.
28:23Tim Seymour:There's a lot more fast money to come. Here's what's coming up next. More big tech on deck. Alphabet and Amazon highlight next week's earnings action. Do this week's reports change the setup for investors? We dive in next. Plus, a Bitcoin breakdown. Crypto stocks crushed as the digital currency hits its lowest level since November. Should you brace for more pain or bet on a comeback? You're watching Fast Money, live from the NASDAQ market site in Times Square. We're back right after this.
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30:26Tim Seymour:Welcome back to Fast Money. Stocks closing out a winning month on a down note. The Dow losing 179 points. The S &P falling almost half a percent. The Nasdaq dropping about 1%. But all three were up about 1 % for the month of January. The small cap Brussels 2000 meantime jumping more than 5%. Chevron and ExxonMobil both managing gains after earnings this morning. The energy giants beating earnings estimates. Chevron seeing its best day since July. And Tesla rising as much as 5.6 % on a report that the company could merge with SpaceX, which is valued around$800 billion in the private market. Mike Coe, would you be more of a fan of Tesla if it did merge with SpaceX?
31:05Well, I mean, if you take a look at Tesla, I mean, and its valuation, you have to assume that, you know, all of it is sort of I'm not going to call a pie in the sky. That's not really fair. What I mean, but I think what we can say is that Elon, the futurist in the robotic side and the AI side and the FSD side. And also for SpaceX, these are sort of common themes. He has these ideas about data centers in space. It's easy to see how he could sort of spin a story that sort of draws all these things together. And the valuation of Tesla, it doesn't really tie to anything but that kind of, you know, basically the future of technology story.
31:41So it doesn't surprise me much that this conversation has taken place because there have been experiences in the past where Elon has talked about the intersection between his companies. And so it doesn't really surprise me that much, I have to say. I did buy it off this because I like buying these headlines. I've been involved in this story before. I haven't been involved with it in a long time. I saw the headline run, to Mike's point, humanoid robots, full self-drive, data centers in the sky, SpaceX valuation. So I think there's a host of reasons to reach for the stock. I don't think you necessarily have to do that.
32:14This does have a knack of retracing, but I am long at night. I just want to be a part of that story.
32:18Tim Seymour:I don't know if you want to go Tesla or the energy stocks. Let me go energy.
32:22Karen Finerman:Sounds like there's enough pie in the sky out there. I think the move in energy stocks is sustainable. And if you look at Exxon, we just had earnings. So this isn't just about Venezuela and what might be. This is about Guyana and what is. This is about a fully integrated company that's never been more efficient and isn't throwing a lot of money into CapEx. It's been a 20 percent move since the beginning of the year with a move in Brent that we talked about yesterday. Finally struck 70 bucks, even if there are supply dynamics. So I think the integrates look great. I think Schlumberger looked great.
32:54Karen Finerman:Offshore integrates look even better in this environment. it.
32:58Tim Seymour:We've got a news alert on the NFL. ESPN reporting the Seattle Seahawks will go up for sale after the Super Bowl. The team playing in the championship game for the first time since 2015 have been owned by Paul Allen's estate since his death in 2018. Coming up, MAG 7 earnings season rolls on with Alphabet and Amazon set to report next week and a longtime tech watcher saying there's one specific AI bottleneck that could hold these names back. You will join the Fast Desk right after this. Missed a moment of fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
33:41Tim Seymour:Welcome back to Fast Money. Apple, Microsoft and Meta all beating earnings expectations when they reported this week. But investors still have questions about the payoff of massive AI spending. Microsoft reporting soaring CapEx alongside slower growth in its closely watched Azure cloud unit. Next week, we'll get more reports headlined by Alphabet on Wednesday and Amazon on Thursday. For what big tech results are signaling, Rick Sherland joins us here on set. He's founder of Sherland Partners and senior advisor to Wedbush Investment Banking. Rick, always good to have you with us. Thank you. First, I want to get your take on the week that was because it's a very interesting week in terms of, in particular, the software names and the death spiral that software seems to be in and how every report that came out, no matter how the company did in relationship to numbers and estimates, got sold off.
34:26Tim Seymour:What's your take on that? Yeah, the market was in a very foul mood this past week. Very, yeah. Microsoft really didn't miss significantly. And, you know, you had ServiceNow and a few others, even stocks that didn't report got hit hard. So I think there's been this view that because you can vibe code that software is replaceable now. And that's very much an oversimplification because for the enterprise space, coding is a small part of software. It's building the workflows and understanding the domain and having that expertise that's 80 % of what it's all about. So I think you're guilty until proven innocent, I think, in this kind of market.
35:09If you have a choice, you buy AI native because you get 50%, 100 % growth. There just aren't a lot of public software companies that are AI native right now. So I think the SAS universe is, you know, kind of under the gun for a little while, and it's going to be a show me. Unfortunately, for that market, there are an awful lot of companies that were thinking they could get out this year in an IPO. A lot of VCs have a lot of these names that didn't get out in 21, last time the window was open. And a lot of private equity hasn't really had an exit in quite a long time. So I think there's got to be a very frustrating environment for them.
35:41But for now, Now I think SaaS is just going to be kind of show me stocks.
35:47Karen Finerman:So, Rick, let's talk. I think you have a core thesis here that the cloud is still capacity constrained and that ultimately all this consternation about demand is hogwash, if I may. Talk about that because, again, markets haven't treated a Microsoft who's investing heavily in infrastructure or the other players. this whole, you know, CapEx spend, and you go all the way back with companies, these companies, and the whole dynamic of where they were free cash flow machines and are now companies where we're thinking about some of those dynamics. Talk about it. Yeah, great. So let me share a perspective with you.
36:22You've got 1 ,900 LLM models out there, a very long tail of models and variants. You've got five companies that will be oligopoly leaders in that market, the names we all know. the leadership keeps changing. Like every couple months, you've got benchmarks out, and now it's Gemini, and next it's ChatGPT, and then it's Llama or somebody else, XAI. What's important is that you differentiate in the market by having a robust stack of software that encourages people to write to your platform and be a part of your ecosystem, which is exactly what Microsoft did around the Windows platform. Everyone wrote for Windows.
37:08It's what Oracle did around the Oracle database. You have to go up the stack into the applications layer and provide all the tooling so that the market standardizes on your platform. And then it doesn't really matter, like, well, who's the latest leader, you know, because they're all so close in the benchmarks. So they're building an ecosystem. And what's really interesting is that the enterprise market is just starting to engage with the LLM models now. The enterprise market pays. The consumer doesn't really pay. 5 % of consumers will pay for what they use. So you're doing inference, but you're not getting paid for it.
37:46But with the enterprise market, they pay, and they are big users of inference. So I think demand is just getting started. And what will drive that demand is agentics. So you're integrating with your enterprise systems. systems, your agents are now interacting with each other in the background, doing things they didn't do before. But you're also doing reasoning. And LLMs are not very good at reasoning. In fact, they're terrible at it. So they do these long chain of thoughts. And the longer the chain of thought, the more they kind of hallucinate and forget what the constraints are. But it burns up an awful lot of inference cycles.
38:21So I would argue that, in terms of demand, we are really just getting started with demand. There shouldn't be any concerns that we're going to burn up all the capacity that we can fund and build. Capacity are more of the constraints of building more data centers, not the demand side.
38:37Tim Seymour:So in terms of building that ecosystem and getting everybody to build on your LLM, where are we on that? So it's fascinating to see. I saw something today OpenAI talked about. They've got 60 apps in their app store. They've hired somebody to run, a high-profile person to run their apps business. So Anthropic has been more focused on the enterprise market, not so much on the consumer side. So they already have 80 % enterprise-driven business. And so those businesses write to the APIs that call that LLM. And so they already have a business in the enterprise. and Davos, guys at OpenAI, Sarah Fryer, I think it was, said that we're about 40 % enterprise.
39:24Enterprise right now, by the end of the year, will be 50. And so you can see them recognizing that's where the money is. And so they're trying to build the stack that we described now. And so it's just they all recognize they need to do a whole complete stack.
39:38Tim Seymour:Okay. So you mentioned two companies that are going to be going public in theory this year. we play this game on Fast Money called Would You Rather so I mean and I know that you're not an analyst you don't wear that hat anymore but in terms of the business OpenAI versus Anthropic and you mentioned that Anthropic is definitely more focused on enterprise at this time although OpenAI is trying to move in that direction so which one would you rather which one has a better prospect well you'll have XAI also which if we read the press it says he says Would You Rather rather by the way I know he brought in a third option but that's fine You can do that.
40:13There are three. It's like, will XAI be part of SpaceX, which in June, Elon says it's my birthday. Maybe we'll go public then. The planets are aligned or whatever. So, yeah, you're going to have more choices. And I would say it's a function, and you can't really answer the question yet, because it's going to be like a back-and-forth basketball game where the lead keeps changing. So the race right now is not so much let's deliver a little better results in our benchmark. It's like let's build a complete stack and prove that we can attract Developers to our platform which gives you durability and higher margins in the business So I think the market outlook for these players is very good and they will turn around and compete against The very companies that are hosting their products today.
41:02They'll compete with Microsoft They'll compete with Google and others in the stack business because they'll have even the companies that write their applications on the platform These guys will turn around and compete against a number of those applications companies because they say well We should have some of that ourselves and we're used to that in the industry We've seen it from Oracle and Microsoft and others. So I think that in addressing the issue of bubbles There is no bubble in demand. It's just getting started. So you build the data center and they will come So I don't I don't see there being a concern about a bubble of demand and you know the financing costs are big Yeah, and so there's concern that well will we have the demand down the road?
41:44Absolutely because as I see this market inflecting on the enterprise space It's really just getting started and there's going to be so much demand for inference Going forward. I don't think it's an issue.
41:55Tim Seymour:Rick great to see you. Hope you'll come back. Thank you Shirlin Shirlin partners coming up Bitcoin breaks down the cryptocurrency off to a rough start this year and hitting its lowest level since November What is next for Bitcoin right after this?
42:17Tim Seymour:Welcome back to Fast Money Crypto getting crunched. Bitcoin dipping below 82 ,000 earlier today, hitting its lowest level since late November. It did recoup some losses and is now trading just under 84 ,000. Bitcoin Treasury MicroStrategy briefly hitting a more than one year low, but also bounced back for more than 4 % gain today. Bono, what do you think is going on here? Well, I think this is somewhat symbolic of risk-off sentiment across the board. As it pertains to Bitcoin versus MicroStrategy, I think it's one where the Bitcoin holdings have more than masked the true operations of the business.
42:53I used to look at this as a way to kind of essentially own the operating business for free. But given the convertible debt, although I do think it's on quite favorable terms for the company, the dilution risk given where it struck is quite low. And to my knowledge, I believe there's zero coupons. So essentially, it's not really a cash drag in the immediacy. It's really a matter of whether you think that Bitcoin continues to drift lower or starts to kind of base and edge higher. In the latter, I would most certainly prefer to own MicroStrategy just because you kind of get the levered kicker. You know, I do think that what we're seeing in terms of tokenization is supportive of the overall altcoin and Bitcoin narrative.
43:33You know, when you look at it, I agree with what Bono had said. But MicroStrategy cuts both ways. You get that leverage on the way down, the way up. So I do agree with that if you want to torque it a little bit on the way back up. A host of reasons why it could have been sold off. Geopolitical. Gold is the new Bitcoin. There's a lot of reasons why rates. There's a lot of reasons why it could have sold off. But I'm waiting to see that stabilization, and I have not seen it yet. All right.
43:58Tim Seymour:Coming up, meet the new boss. Big C-suite changes have taken effect at both Target and Walmart. That will happen actually this weekend. What the insiders are saying is the stocks see vastly different price performance. More Fast Money in two.
44:16Tim Seymour:Welcome back to Fast Money. Retail giants Target and Walmart have moved in opposite directions over the past year, but both will see new CEOs take the reins on Sunday. What will the new leaders bring to each company? CNBC's Courtney Reagan's got more on this. Hey, Court. Hi, Melissa. So both Michael Fidelke and John Ferner are multi-decade employees that their respective retailers target in Walmart, but facing different circumstances. Both stocks are up a similar 6 % to 7 % so far in 2026, but as you pointed out over the last 12 months, the movement was in very opposite direction. Sources tell me John Furner is viewed as a servant leader like his predecessor, Doug McMillan, but the next vintage.
44:51He's insightful and willing to embrace change. Furner's worked across disciplines, geographies, and formats. He's been integral to recent technology investments and connected, he's connected in retail beyond Walmart from mom-and-pop retailers to lawmakers, thanks to his three years as NRF chairman. Now, Michael Fidelke at Target hasn't been as involved in the broader retail community, but has a similar down-to-earth leadership style. He's from Iowa, born on a farm. I'm told he's a straight shooter. He eats in the employee cafeteria. He seeks the word on the ground before he makes decisions. And Fidelke's top priority is returning to growth, with particular focus on recapturing that Target-style cachet, but at affordable prices.
45:28He's already been given a running start to start deploying this playbook, And sources do say the acceleration office that he ran has proven that he's willing to challenge the status quo when it's necessary.
45:39Tim Seymour:Melissa? Court, thanks. Courtney Reagan. Mike Coe, which one do you like? The status quo is just fine at Walmart. So that's just basically keep doing what you're doing because they're doing it very, very well. Target, obviously, is the place where they have a lot to work on. And if he's not concerned about upsetting the Apple card, I think that's a good thing. Options market reflects that, too. We saw calls outpacing puts by about two to one on above average bullish volume there.
46:05Karen Finerman:Well, I think most people are aware that target is the T and Timbo. And so could they not be? I mean, I think I think that's really said there. I think we have seen a little bit of change in terms of the segment dynamics and relative value.
46:19Tim Seymour:Up next, final trades.
46:37final trade time mike co i like alphabet and i like options google options going into the print next week five percent implied move following i would use karen's three-day rule of caution but i think take two is going to give you an opportunity to own it for the long term
46:55Tim Seymour:Timbo.
46:56Karen Finerman:Yeah, Pfizer, Tim's Pfizer reports next week. I think there's some plus in their oncology business, amongst other things. Steve? I'm going to go with a T-stock. It's going to be Tesla, and it's not the T in Tim's. T-bow. Timbo. Timbo. Oh, what did I say, T-bow?
47:11Tim Seymour:Yeah. It's okay. Anyway. People get confused. Thanks for watching Fast. Have a great weekend. Matt Money, Dream Kramer starts right now.
47:21Tim Seymour:All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such.
47:48To view the full Fast Money Disclaimer, please visit cnbc.com forward slash Fast Money Disclaimer. I want to grow the game so every kid can fall in love with soccer like I did. So I asked myself, what would you like the power to do? My answers inspired me to invent a pop-up soccer goal that can turn any basketball court into a street soccer pitch. Bank of America champion street soccer advocate Kyle Martino and everyone who dares to ask, what would you like the power to do? Bank of America, proud to be the official bank of U.S. soccer and FIFA World Cup 2026. Bank of America NA, member FDSE.
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President Trump selecting former Fed Governor Kevin Warsh to succeed Jerome Powell as Fed Chair. The market, treasury, and dollar reaction, and what to expect from Warsh as Trump continues to push for lower rates. Plus tech earnings continue next week, with investors eyeing the massive AI capex plans. If the investment will pay off, and which company has the edge in the artificial intelligence race.
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